Shoppers Stop to close unprofitable outlets, aims profit to rise 50% in next fiscal

By

Maverick Martins

Published
Mar 9, 2017

India’s largest fashion retailer Shoppers Stop is looking to cut down its cost by shutting down unprofitable outlets. It is also planning campaigns to target young consumers and is expecting a 15% rise in sales and 50% profit in the next fiscal.

 “We have about 10% of our bottom stores that are not working and two stores were shut in the last quarter. We have a plan to cut down size or relocate, or shut down, three more stores. Eight old stores will go under redesigning. So, cost cutting itself should lead to about a 50-60-basis-point gain,” said Managing Director, Shoppers Stop Govind Shrikhande in an Economic Times report.

The K Raheja Corp-promoted retailer, which operates 81stores in 37 cities, is aiming to grow sales by 15% and profit by 50% in the financial year that starts next month.

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 “The connect of objective communication has been missing and has been lost out in the clutter of sale. We haven’t really had campaigns for categories. We haven’t created a brand campaign in the last 24 months,” the MD said. Hence, the company will also be investing heavily in brand campaigns and marketing.

It will launch a new brand campaign in April, along with campaigns specific to various categories. Another objective is to drive sales through private and exclusive brands by making them more relevant to youth.

While the contribution of private brands like Stop, Life, Haute Curry, Vittorio Fratini, Eliza Donatein & Kashish is 11.5% of sales, exclusive brands contribute 4.1%. The exclusive brands it sells include Wrogn by Virat Kohli, Desigual the Spanish fast fashion brand and Imara by Shraddha Kapoor.

Rheson by Sonam & Rhea Kapoor will be launched towards the end of March.

“We will have to bring in younger brands which will bring in the differential for the younger customers, and also keep on cleaning the brands that don’t make any sense today,” Shrikhande said.